House Republicans are pushing debt ceiling talks to the brink, displaying risky political bravado as they prepare to leave town Thursday for the holiday weekend just days before the U.S. could face an unprecedented default that could hurl the global economy into chaos.
Speaker Kevin McCarthy said he's directed his negotiating team “to work 24/7 to solve this problem.”
Arriving at the Capitol, McCarthy, R-Calif., said that “every hour matters” in talks with President Joe Biden's team as they work toward a budget deal. Republican are demanding spending cuts the Democrats oppose, and McCarthy said a deal could come together “at any time.”
From the White House, press secretary Karine Jean-Pierre said the president continues to fight for his priorities and “productive discussions” continue. Negotiators met virtually Thursday morning, she said.
“We're fighting against extreme Republican proposals,” she said, quickly adding. “Default is not an option.”
But it's clear the Republican speaker — who leads a Trump-aligned party whose hard-right flank lifted him to power — is now staring down a potential crisis.
Lawmakers are tentatively not expected back at work until Tuesday, just two days from June 1, when Treasury Secretary Janet Yellen has said the U.S. could start running out of cash to pay its bills and face a federal default.
Fitch Ratings agency placed the United States’ AAA credit on “ratings watch negative,” warning of a possible downgrade because of what it called the brinkmanship and political partisanship surrounding the debate over lifting the debt ceiling.
“This is a battle between extremism and common sense,” said Democratic Rep. Katherine Clark of Massachusetts, the minority whip.
The Republicans, she said, “want the American people to make an impossible choice: devastating cuts or devastating debt default.”
Weeks of negotiations between Republicans and the White House have failed to produce a deal — in part because the Biden administration never expected to be having to negotiate with McCarthy over the debt limit, arguing it should not be used as leverage to extract other partisan priorities.
McCarthy is holding out for steep spending cuts that Republicans are demanding in exchange for their vote to raise the nation's borrowing limit. The White House has offered to freeze next year's 2024 spending at current levels and restrict 2025 spending, but the Republican leader says that's not enough. Talks lasted until midnight Wednesday
“We have to spend less than we spent last year. That is the starting point," said McCarthy, R-Calif.
Failure to raise the nation’s debt ceiling, now at $31 trillion, to pay the nation's already incurred bills would risk a potentially chaotic federal default, almost certain to inflict economic turmoil at home and abroad. Anxious retirees and social service groups are among those already making default contingency plans.
Even if negotiators strike a deal in coming days, McCarthy has promised lawmakers he will abide by the rule to post any bill for 72 hours before voting — now likely Tuesday or even Wednesday. The Senate, where Democratic Majority Leader Chuck Schumer has vowed to move quickly, would also have to pass the package before it could go to Biden’s desk to be signed into law, right before next Thursday's possible deadline.
Pushing a debt ceiling increase to the last minute is not uncommon for Congress, which has been here before. But it leaves little room for error in a volatile political environment. Both Democrats and Republicans will be needed to pass the final package in the split Congress.
The contours of a deal have been within reach for days, but Republicans are unsatisfied as they press the White House team for more.
In one potential development, Republicans may be easing their demand to boost defense spending, instead offering to keep it at levels the Biden administration proposed, according to one person familiar with the talks and granted anonymity to discuss them.
The Republicans may achieve their goal of of rolling back bolstered funding for the Internal Revenue Service if they agree to instead allow the White House to push that money into other domestic accounts, the person said.
The teams are also eyeing a proposal to boost energy transmission line development from Sen. John Hickenlooper, D-Colo., that would facilitate the buildout of an interregional power grid, according to a person familiar with the draft.
The White House has continued to argue that deficits can be reduced by ending tax breaks for wealthier households and some corporations, but McCarthy said he told the president as early as their February meeting that raising revenue from tax hikes was off the table.
Donald Trump, the former president who is again running for office, has encouraged Republicans to “do a default” if they don’t get the deal they want from the White House.
While Biden has ruled out, for now, invoking the 14th Amendment to raise the debt limit on his own, Democrats in the House announced they have all signed on to a legislative “discharge” process that would force a debt ceiling vote. But they need five Republicans to break with their party and tip the majority to set the plan forward.
“Sign the bill!” Democrats yelled on the House floor after a Republican leader announced the holiday recess schedule.
Agreement on a topline spending level is vital. It would enable McCarthy to deliver spending restraints for conservatives while not being so severe that it would chase off the Democratic votes that would be needed in the divided Congress to pass any bill.
But what, if anything, Democrats would get if they agree to deeper spending cuts than Biden's team has proposed is uncertain.
McCarthy has quipped that the Democrats “get a debt ceiling increase” — typically something both parties take responsibility for doing.
The negotiators are now also debating the duration of a 1% cap on annual spending growth going forward, with Republicans dropping their demand for a 10-year cap to six years. The White House initially offered only one year, for 2025.
Republicans want to beef up work requirements for government aid to recipients of food stamps, cash assistance and the Medicaid health care program that the Biden administration says would impact millions of people who depend on assistance.
All sides have been eyeing the potential for the package to include a framework to ease federal regulations and speed energy project developments. They are all but certain to claw back some $30 billion in unspent COVID-19 funds now that the pandemic emergency has officially been lifted.
The White House has countered by proposing to keep defense and nondefense spending flat next year, which would save $90 billion in the 2024 budget year and $1 trillion over 10 years.
Associated Press writers Chris Megerian, Seung Min Kim and Mary Clare Jalonick contributed to this report.© Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
No deal needed.
Every country is brought low first by disloyal elements within. Looks like the Republicans will be doing that to the US.
Republican tax cuts for the rich after Eisenhower, starting with Reagan, ended broad based prosperity for Americans.
And that is the Republican contract on America.
I think this gambit is going to backfire spectacularly.
I think Biden should use the 14th amendment. Even if ultimately, the GOP takes it to the Supreme Court and they win causing a default, good luck spinning this as anything other than trying to tank the economy.
Hold the line.
This isn’t real as long as there is supposedly not money to pay our bills but still money to send to Ukraine.
What’s the hair going to do now?
He pouted and puffed but Biden wouldn’t give into his hostage taking. (Maybe he should have said “Don’t you know who I am?” like he did to Trump during the insurrection? Maybe that would have helped? )
He can’t get his own caucus to vote for a bipartisan agreement even if he wanted them to.
So, I guess send everybody home?
Reminds me of that episode of “The Office” where Micheal Scott has promised everyone a big surprise at the end of the day, but he’s got nothing and his corporate bosses won’t pay for his hair-brained proposals.
At the end, everyone just abandons him in disgust.
So that, but with American capitalism hanging in the balance.
Hope you aren't paid in US dollars.
Lol! Nope, we can pay our bills. It's just the GOP would rather use this as a gambit slash spending on things like healthcare for the poor and elderly. Because they're ghouls.
The GOP raised the debt ceiling multiple times under Trump and other GOP presidents without protest.
That's all you really need to know.
Then you are about to be a very poor and jobless man. Really won't seem too smart trying to extort your country then, will it?
Partisan brinkmanship games, bloody disgusting.
You also need to know there’s a new House speaker in town and not the old capitalist speakers we had of the past. Phenomenal job Kevin is doing.
can we? Oh ok then the whole Democrat narrative is false that we cant?
Kevin McCarthy approval never been higher.
Donald Trump net favorability never been higher.
DeSantis had a DeSaster, undermined by Elon.
57-60% of Americans polled recently support the position of no debt ceiling increase without spending cuts.
Democrats were screaming at Republicans to stay the holiday weekend and pass a bill.
They already did pass a bill in the House, so the ball is in the Dem Senate and the White House.
Anti-capitalism ? Becoming a socialist?
Yes the Republicans stance on the budget is just about protecting tax breaks for their billionaire donors.
Actually, he is not "in town". He ran away like the simpy coward he is.
somebody better tell Janet Yellen we can pay our bills then, seriously. Seems she would know. if she is wrong, she needs to be told, and quickly cause she is causing a Democrat manufactured panic.
What a bunch of jokers!
God, heck No!
He’s not a loser
We need them, without them, society would collapse. Thank God for them.
The one thing they learned from the housing crisis is, there are limits to turning a blind eye, as the fear in the GOP was palpable and took Obama to solve a world wide economic disaster caused by Republicans.
This time, it won't happen, they're just playing what they think is chicken, but it's so Kevin to think he's being clever, when he's a paper see through cut out.
By Monday, there will be no default. Bank it.
The high before the fall....ROFL...
Just wait until the indictments start flowing....
Definitely a DeSaster - nothing but a phony RINO who has made Florida into one of the worst states in the US...according to one Floridian... Glad to see all of MAGA-world agree...
And Repubs said "forget it" we want to crash the economy...
Hostage-taking - as you and Gaetz admitted to yesterday...
Huh? It's the GOP threatening not to pay the bills. Not the democrats.
That was nice of rocket-scientist and kiddie-groomer Matt to say the quiet part out loud and on camera.
"We don't feel like negotiating with our hostage."
I am sure that will have no unintended consequences. None at all.
You said it’s not true we can’t pay our bills soon. Not whose “fault” you claim it is. The American people in polling say the Republicans are correct.
it actually is the democrats not paying. if the Dem Senate and the Dem Biden don’t take action.
The republicans passed a bill already to raise the debt ceiling, their part is done.
No answer for three days on this - maybe today?
Trump 2019: “That’s a very, very sacred thing in our country, debt ceiling. We can never play with it." “I can’t imagine anybody ever even thinking of using the debt ceiling as a negotiating wedge,”
Trump 2023: “I say to the Republicans out there – congressmen, senators – if they don't give you massive cuts, you're going to have to do a default, and I don't believe they're going to do a default because I think the Democrats will absolutely cave, will absolutely cave because you don't want to have that happen.
So MAGA-faithful, which Trump is lying?
Lots of this nutter is being fuel by White people,the same White people with the Jan 6 mentality,think they are the only one pay taxes,when they will be the one that do not get their government check if the government shutdown
no in the United States of America.
sorry for your loss.
been waiting since 2015, havent I?
Nobody trust US debts any anymore. This country is bankrupted and look being rely on debts. By using political intimidating methods pressuring other countries to buy US debts. This is mafia industry!
lol No they don't.
lol No it isn't. Why are rightists want the poor and elderly to suffer? You'll notice they've repeatedly raised the ceiling under Trump three times.
wow look here- LOL
"CNN Poll: 60% say debt ceiling increase should come with spending cuts"
What evidence have you provided?
Do you need it explained to you what happens when they cut medicaid and medicare?
Because it cuts funding to medicare and medicaid, duh.
Where does it say most people want to cut medicare and medicaid? They don't. Cutting costs is generally popular until you get into specific. Medicaid and Medicare, programs that rightists want to cut, are broadly popular.
And, again, I want to know why you didn't have any problem with Republicans raising the debt ceiling 3 times? Very hypocritical.
Complete BS. Not even close to the truth.
Again, the GOP got the House for a reason and the Dems still don't get it why that is, just astounding.
well good thing thats not what I said and not what the poll said.
The Republican position is popular and the Biden messaging has been ineffective and repetitive.
just like yours.
lol Nice strawman.
Of cutting entitlements? No it isn't.
There's a reason the house's approval rating is lower than Bidens!
and your straw man is false too.
"The House GOP bill doesn’t affect spending on Social Security and Medicare. Such spending, referred to as mandatory, accounts for about two-thirds of all federal spending."
Wait a minute...your fellow MAGA-partner has clearly said here multiple times that "Repubs now control the purse"....
OK, if you have the "purse", then who is responsible for paying the bills?
Wow, look here - a Mega-flip...
Someone who disparaged CNN's polls for years is now promoting that Lib bastion CNN....
Welcome to Team Blue...
Republicans, who did their part and passed a bill to lift the debt ceiling to do so.
Dems? done nothing in the Dem controlled Senate or the Dem controlled White House to proceed.
No when *even* CNN admits you are losing in the messaging and Americans prefer the Republican position, you are definitely losing. Because if it was even close to 50/50 they would be lying.
poor Democrats.....its all your fault. Republicans passed the bill you said they could never pass.
now its super inconvenient and your President is packing up his beach wear for the long vacation again.
But Dems don't have the "purse" - so how can they pay anything?
OK - you now like CNN. Nice flip...
Hmm....likes to brag they now have the purse - but keep the purse closed when America's bills are due...
Even when they opened the purse WITHOUT CONDITIONS THREE TIMES during Trump's years...then ran the debt up by $7.8 TRILLION....
Americans see what fools and hypocrites the Repubs are...
by the Dem Senate also passing the bill that the Republicans (who do pay for things) submitted to them.
then Biden signs it.
As you admitted yesterday, that's hostage taking - "sign my bill or we'll default"...
And it still doesn't take away that fact that your team controls the purse....the only money is in the purse, so if the bills don't get paid, Americans know who to blame...
And once again no explanation for this...
*Even when they opened the purse WITHOUT CONDITIONS THREE TIMES during Trump's years...*then ran the debt up by $7.8 TRILLION....